HP, Dell Lead Server Growth

The worldwide server market grew at its fast pace since 2003 in the second quarter, according to IDC, with HP and Dell gaining market share as IBM's server revenue fell.

The worldwide server market in the second quarter grew at its fast pace since 2003, as businesses continued to upgrade their IT infrastructures across all regions globally, a market research firm says. Worldwide factory revenue rose 11% in the quarter to $10.9 billion from $9.8 billion the same period a year ago, IDC said in its quarterly report on the industry. The increase marked the second consecutive quarterly rise and the fastest year-over-year growth rate since 2003.

Meanwhile, shipments rose 23.8% year over year in the quarter, a slight improvement over the first quarter's 23% increase. The latest growth rate was the fastest in more than five years, IDC said.

"IDC continues to see widespread infrastructure refresh occurring across all geographies," IDC analyst Matt Eastwood said in a statement released late Tuesday. "While much of this refresh is occurring first in x86-based servers, IDC expects the recovery to extend to Unix and mainframe platforms in the second half of 2010."

Indeed, low-priced systems, which are typically x86-based servers that are linked together to handle a variety of data center tasks, saw the greatest improvement in year-over-year revenue, which rose 31.7%, IDC said. Meanwhile, revenue from mid-range servers improved significantly, increasing 15.6%. The increase was the first for the segment in nine quarters. But the demand for high-end enterprise servers continued to be soft. Revenue for the segment fell 27.2% year over year, marking the seventh consecutive quarter of market contraction.

In looking at the vendors, Hewlett-Packard held the top slot, increasing factory revenue 26% year over year to hold a 32.5% market share, a gain of 3.9 percentage points. IBM was number two with a 29.8% share, as revenue fell 3.2% from a year ago. IBM saw weak sales of its Power Systems and System z servers as customers waited for the completion of a product refresh cycle for both systems. However, sales of IBM's x86-based System x servers remained strong in the quarter.

Dell maintained its third-place position with a strong 36.5% revenue increase from a year ago, as sales rose among enterprise customers, IDC said. Dell ended the quarter with a 15.3% market share, a gain of 2.9 percentage points.

Rounding out the top five were Oracle with an 8.6% market revenue share and Fujitsu 3.4%. Oracle became a server vendor with this year's acquisition of Sun Microsystems.

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